Tuesday, March 31, 2015

In a
previous column I mentioned the story of the Amityville, New York house, the
scene of a gruesome family murder that was sold, led to claimed paranormal
activity, movies, books and more sequels, all detailing the house’s sordid past
and its alleged possession. That house
has been occupied and sold repeatedly despite its infamy, and without further
incident.

Other famous
or infamous houses face similar problems.
The house used in the Brady Bunch
is a real home in Studio City, California.
The real house, built in 1959, was a one story, typical middle class
home. A false second story façade was
added for exterior shots and the home was frequently shown during the show’s
run and many subsequent movies. Tourists
continue to flock to the home, despite many years of change and the
installation of a privacy fence. Simply
google “the brady bunch house” and you will get 23,100 hits, including a
www.zillow.com listing at http://tinyurl.com/4yfmj33. Given the notoriety, any
listing would have to disclose this to prospective buyers.

Another
infamous house was the home leased to the Heaven’s Gate cult that committed
mass suicide in the 9,200 square foot mansion in March, 1997. The notoriety and required disclosure drove
the value of the home down from over $1.2 million to less than
$700,000.00. Eventually, due to so many
onlookers and no buyers, the neighbors bought the house, changed the street
name and tore down the house, to protect their community. Apparently, a street name change with a
slightly different address has solved the issue, as it appears that a
multi-million dollar mansion is now located on the same property.

One house affected by its notoriety is the Highland Park home of Cameron, Ferris’
best pal in the movie, Ferris Bueller’s
Day Off, and the scene of the infamous Ferrari car kill. Originally listed for $2.3 million in 2009
with hopes that the film’s tie-in added value, it languished on the market for
years despite a unique and historic architectural design. The home finally sold after five years on the
market for less than $1.1 million. One
factor that drove down the price was the constant presence of curious tourists,
including some who trespassed to get a closer look. Zillow does not even mention the film in its
listing at http://tinyurl.com/lmc9dg.

The owners
of the home in the movies Home Alone and Home Alone 2 put a large “Private
Property – Stop” no trespassing sign right on their front lawn to stop the constant
flow of trespassing tourists. Despite
the sign, tourist intrusion is a fact of life for this famous house. Selling for $1.6 million in 2012, the home
may not have suffered as much from the notoriety as some other famous houses,
as Zillow still describes the home (http://tinyurl.com/ygwbdfq) as, “the
quintessential family home, as depicted in ‘Home Alone,’ filmed here 20 yrs
ago.”

An allegedly
haunted house was the subject of a legal challenge of rescission when a buyer,
after signing a contract, discovered the history of the home as “haunted.”
Prior to the sale, the former owner had a deep knowledge of the home’s alleged
haunted past. The owner had even written an article that was published in the
1977 Reader’s Digest, “Our Haunted House
on the Hudson.” Prior to signing the
contract, neither the seller who wrote the article, nor the listing agent,
disclosed the haunted history to the buyer.

The buyer,
unaware of the history at the time of the sales contract, became concerned
about the ghostly facts prior to closing and refused to close. The $32,500.00 deposit was retained by the
seller for the buyer’s failure to close, and the buyer’s lawsuit was initially
dismissed. The buyer appealed the dismissal and won on his claim for
rescission. The appellate decision that followed is full of interesting and
ghostly puns and can be found here: http://tinyurl.com/yzdcr6n.

The appellate
court held that the Reader’s Digest article, in which the seller claimed the
house was, in fact, haunted, rendered it haunted as a matter of law, whether or
not it actually housed poltergeists. The court further held, as a result, that
rescission was appropriate under those circumstances, despite New York’s then
adherence to the legal rule of Caveat
Emptor, or “buyer beware.”

Further, the court rejected the buyer’s
additional claim of fraud, which sought damages against both the seller and
broker, based on allegations that both parties had a duty to disclose the
haunting. The court reiterated the general rule that neither party had a duty
to disclose those facts. As a result, the court held that the buyer was
entitled to rescission, return of the deposit and nothing more. Under Florida law, the opposite would have
been true as to the fraud claim. Since
1985, the law in Florida is no longer Caveat
Emptor, requiring sellers and brokers to reveal all material facts that
affect the value of a home for sale.

In
hindsight, the buyer of the haunted house may have made a financial mistake. The lovely home in Nyack, New York was sold
for over $1.7 million in 2012, nearly triple what he would have paid in 1990. Because of possible issue underlying any
home, the best advice to buyers on any home purchase is to ask questions and
research any home thoroughly before buying lest something unwanted be
discovered.

Michael
J Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business
oriented law firm serving all of South Florida, with offices in Palm Beach
County. They specialize in real estate
and business law, and can assist buyers and sellers in loans and
purchases/sales. They can be reached at
561.594.1452 or by e-mail at mjposner@warddamon.com

Sunday, March 1, 2015

With the Maltz Theater bringing back Glengarry Glen Ross, I
thought this would be a good time to look at how various real estate issues are
portrayed in cinema. From bad salesmen,
bad spouses, and bad ghosts, real estate has been a good issue as a backdrop to
explore the relationship between individuals, from greed, envy and fear.

Glengarry
Glen Ross

A classic Mamet play turned into an
acclaimed picture, Glengarry Glen Ross
tells the story of several real estate salesmen trying to keep their jobs in
the seamy side of out of state land sales, cold calls and commission based
sales. The name of the game is quality
leads, those people who have expressed an interest in buying a timeshare, beach
front land or a mountain or lake lot.

To motivate
his employees, the owners of the office send in a foul mouthed consultant
played by Alec Baldwin, who motivates the salesman with the classic line,
"As you all know first prize is a Cadillac El Dorado. Anyone wanna see
second prize? Second prize is a set of steak knives. Third prize is you're
fired." An all-star cast includes
Jack Lemmon, as a washed out salesman, Kevin Spacey as the office manager who
holds the keys to the best leads, Ed Harris, Alan Arkin and Al Pacino, the top
closer, round out the cast.

The
techniques used in the movie to sell the land are still used today. ABC, "always be closing" is a key
technique to sell what most rational people would deem worthless property by
finding a buyer’s weakness and appealing to buyer's vanity, greed, sexuality
and the like. These sales pitches, with
come-ons like a free week-end, glossy brochures, or dream vacation spot that is
available today only are almost always an exaggeration, designed to convince
people, on an emotional level, to part with their money. Always research carefully and consult with an
objective professional before any real estate investment is the key to not
making a bad deal you will later regret.

The Money Pit

Buying a home as-is is very common
in Florida real estate. Essentially the
buyer relies on two things, the duty of a seller to disclose material facts
about a home that affect value (such as a leaky roof, electrical problems,
broken pumps, etc.) and the home inspection which is supposed to detect most
patent defects. In The Money Pit, two urban yuppies have an opportunity to buy a
“valuable home” on the cheap, with a seller claiming desperation and need for a
quick sale. After a quick tour with the owner, who has hidden numerous defects,
they rush and buy the home without any professional inspection, only to find it
needs hundreds of thousands in repair.

The film starred Tom Hanks and
Shelly Long as the couple who buy the disaster and then watch as the multi-month
long repair process, with pricey contractors, sanctimonious inspectors and an
ex-boyfriend drive them apart. Since
they were not married, their split could have had substantial legal
consequences, but like most movies, they reconcile at the end, to provide us
with the requisite happy ending.

As they say, if it is too good to
be true, it probably is, and rushing to buy a home without proper seller
disclosure and a professional inspection can leave you with your own money
pit.

The War of the Roses

It is often
said that marriage is grand but divorce is $100,000 grand. In The
War of the Roses, the battleground is over the ownership of a house between
a divorcing couple played by Michael Douglas and Kathleen Turner. During their marriage, they purchase an old
mansion, which Turner spends years improving until it is near perfect. At that point, with the house remodeling
distraction over she realizes she despises Douglas, and demands a divorce, with
a further demand she keep the house because she made it what it is, despite his
funds paying for the improvements.

Instead of
agreeing, or selling the house, they commence a war, escalating when Douglas,
after being thrown out, manages to move back in to the very house in dispute,
escalating the war, as the two continue to battle, destroying the house in the
process. Eventually, there fight leaves
them hanging from a chandelier, which due to the weight crashes down and kills
them both.

Since neither
would agree to allow the other to keep the house, the only legal recourse
should have been a partition, where a court orders the sale of indivisible
property (like a single family home).
Either one could bid, with the sale proceeds being split equally. This simple process would have spared their
lives, and allowed the one willing to pay the most to keep the house. Or better yet, sign a pre-nuptial agreement
deciding in advance who gets what if the end of the marriage occurs.

The Amityville Horror

A classic
horror tale based on alleged real world events.
In 1975, Ronald DeFeo, Jr. murdered his entire six member family in
their home. The house remained vacant
for over a year, and was then purchased for a bargain price by the Lutz
family. Fulfilling her duty to disclose material
facts that affect value, the Real Estate Broker disclosed the murders. The Lutz' moved in anyway and claimed they
had to leave a month later due to claimed paranormal activity. They sold the rights to their experiences
which led to a book, and twelve (yes, twelve) films, including the original
1979 version starring James Brolin and a 2005 remake with Ryan Reynolds.

The duty to
disclose deaths, suicides and murders in homes is always a tricky issue. Generally isolated events of a non-heinous
nature do not require disclosure if the disclosure would not affect the value
as determined by a reasonable person. A
mass murder as described in the movie less than two years ago does qualify as a
must disclose issue. Florida law even
protects sellers and realtors from having to make a disclosure, and buyers have
no cause of action to sue “for the
failure to disclose to the transferee that the property was or was suspected to
have been the site of a homicide, suicide, or death or that an occupant of that
property was infected with human immunodeficiency virus or diagnosed with
acquired immune deficiency syndrome.” F.S. §689.25.

Michael J Posner, Esq., is a partner in Ward
Damon a mid-sized real estate and business oriented law firm serving all of
South Florida, with offices in Palm Beach County. They specialize in real estate law and business
law, and can assist buyers and sellers in loans and purchases/sales. They can be reached at 561.594.1452 or by
e-mail at mjposner@warddamon.com

About Me

I am a Florida Board Certified Real Estate Attorney with 30+ years of residential and commercial real-estate experience.
I am an equity partner in Ward, Damon, Posner, Pheterson & Bleau, a mid-sized law firm serving all of South Florida, with three offices in Palm Beach County. Our firm specialize in and can assist in buying, borrowing and selling property throughout South Florida. I can be reached at 561.594-1452, mjposner@warddamon.com or www.warddamon.com